Geoff Mann

Abstract for conference. Stay tuned for more on this. Title: Unveiling the True Culprit: The Soaring Cost of Urban Housing and the Imperative for Land Value Capture In this presentation, we delve into a surprising revelation regarding the escalating cost of housing—it's not about the house itself but the dirt beneath it that elevates cost. The crux of the issue lies in the spiraling price of urban land. Urban land prices surge in tandem with its real estate value, a phenomenon exacerbated by the unchecked increase in allowable density within cities. Most urban planning strategies for reducing housing costs focus on boosting the number of housing units that can be placed on land without addressing the surge in land prices this spawns, leading to the frustrating paradox where per square foot housing costs refuse to decrease even after new density is built. Even without rezoning efforts, urban land values inflate unabated, claiming an increasingly significant share of fixed assets. Over the past four decades, urban land has transitioned from representing well under half of the value of other assets to over twice as much as the value of all other fixed assets combined.  This shift intertwines with a concerning trend: a diminishing share of productivity gains in real dollars for wage earners, as capital monopolizes these gains. Urban land emerges as a consistent and non-productive repository for surplus capital. To counteract this trend, the presentation advocates for land value capture as a vital regulatory solution. A feasible approach involves introducing a development tax at the time of rezoning, aiming to capture a significant portion of the new-found land value. Vancouver's pioneering effort with an 80 percent "land lift" tax serves as a compelling precedent, urging wider adoption of this strategy to address the pressing issue of housing affordability in urban areas. Professor Patrick M. Condon